Section A: Remuneration policy and governance
Our remuneration policy details the principles that govern our remuneration approach. Our principles ensure remuneration is competitive, incentivises performance and reflects regulatory requirements. A central feature of our remuneration policy is that remuneration must be aligned with risk, and with the conduct expectations of Barclays Africa, as well as those of our regulators and stakeholders.
Our policy applies to all Barclays Africa employees, and ensures their alignment with Group priorities. We achieve this by linking remuneration to an assessment of performance, based on expected standards of delivery and behaviour.
Remuneration decisions must:
Support the objective of attracting, retaining and competitively rewarding employees who have the ability, experience, skills and values to deliver our strategy.
Reward business results that are achieved in a manner consistent with our Values.
Protect and promote shareholder interests by incentivising employees to deliver sustained performance and create long-term value through the delivery of the Group’s strategy. Remuneration decisions will reflect the performance of individuals.
Create a direct and recognisable alignment between remuneration and risk exposure, as well as adjusting current and deferred incentives for current and historic risk, including malus adjustments, where appropriate.
Be simple and clear for employees and stakeholders, with a focus on ensuring the link between pay and performance is well understood.
Ensure that the balance between shareholder returns and remuneration is appropriate, clear and supports long-term shareholder interests.
These principles are unchanged, and underpin our 2016 remuneration decisions.
While we apply a common remuneration structure across the Group, we sometimes differentiate its implementation according to local market practice and statutory or regulatory requirements.
We apply a holistic and balanced approach to reward. We position pay at the market median, while remuneration for critical skills is positioned above the market median to attract talented individuals with outstanding track records.
Our approach includes providing:
- an environment where employees can do their best work and optimise their potential;
- a fixed salary based on the role, individual-specific skills, experience and track record;
- an annual bonus, subject to affordability and performance;
- benefits that reflect the lifestyle needs of employees, including pension and insurance; and
- a recognition scheme where employees are commended for their contribution.
Composition of total remunerationOur total remuneration comprises fixed and variable components. The delivery of these is as follows:
Fixed remuneration reflects the role, location, responsibilities, skills and experience.
|Salary||Reflects an individual’s skills and experience and provides the basis for a competitive remuneration package.|
|Role based pay||Fixed remuneration not considered as salary for pension and benefit purposes, unless legally required in a particular geography.|
|Benefits||Competitive benefits (including pension, insurance etc.) appropriate to an employee’s role and location.|
Variable remuneration rewards the achievement of Group, business unit, team and individual objectives.
|Non-deferred||Cash||For executive directors, prescribed officers and material risk takers, 50% of the non-deferred bonus award is delivered in cash. For all other employees, 100% of the non-deferred bonus award is delivered in cash. All non-deferred bonus awards are paid in March.|
|Share Incentive Award||For executive directors, prescribed officers and material risk takers, 50% of any non-deferred bonus award is delivered as shares at or around the time that the award is paid. This releases after six months, in September.|
For executive directors and prescribed officers, 40% of variable remuneration is non-deferred and 60% is deferred.
|Deferred2||Cash Value Plan||50% of the deferred annual bonus award releases in three equal annual tranches (five equal tranches for certain material risk takers, including executive directors and prescribed officers), subject to continued service and malus provisions.|
|Share Value Plan||At least 50% of any deferred annual bonus award vests in three equal annual tranches (five equal tranches for certain material risk takers, including executive directors and prescribed officers), subject to continued service and malus provisions. An additional six-month holding period applies for executive directors, prescribed officers and other material risk takers.|
|1||All variable remuneration awarded to executive directors, prescribed officers and other material risk takers is subject to a clawback provision.|
|2||The deferred annual bonus award is delivered 50% Cash Value Plan and 50% Share Value Plan. Employees can elect 100% Share Value Plan.|
|1||The Prudential Regulatory Authority made revisions to the Remuneration Rulebook, which apply from 1 January 2016. These include variable remuneration deferral over five years for certain material risk takers, including the executive directors and prescribed officers. The regulation will continue to be applied while we are regulated by the Prudential Regulatory Authority.|
Process to determine bonusesWe determine bonus pools based on affordability and performance.
- We determine Group, business unit and function bonus pools based on Barclays Africa’s as well as individual business units’ performance. We adjust bonus pools, as appropriate, for risk and control events.
- Managers recommend bonus awards after having assessed individual performance against personal objectives and behaviour in line with our Values. A robust process ensures individuals who are accountable, directly or indirectly, for risk events have their remuneration adjusted appropriately.
- Consistency checks are conducted at Group, business unit and function level.
- We review and approve proposed bonus pools and senior manager awards. The aggregate Group bonus pool is approved by the Group Audit and Compliance Committee, based on the Group’s 2016 performance.
Service contracts and termination arrangements
Appointment dates to the executive director and prescribed officer position:
Maria Ramos – 1 May 2009
David Hodnett – 1 March 2010
Peter Matlare – 1 August 2016
Jason Quinn – 1 September 2016
Craig Bond – 1 January 2013
Nomkhita Nqweni – 1 October 2015
Our approach to payments in the event of termination is to take account of the individual circumstances, including the reason for termination, individual performance, contractual obligations and the terms of the deferred bonus plans.
|Notice period||All executive directors and prescribed officers have a six-month notice period, with their potential compensation for loss of office being six months’ fixed remuneration.||Executive directors may be required to work during the notice period, or may be placed on garden leave, or if not required to work, the full notice period may be provided with pay in lieu of notice (subject to mitigation where relevant).|
|Treatment of role based pay||Role based pay ceases to be payable from the termination date. Therefore, it will be paid during the notice period and/or garden leave, but not where Barclays Africa elects to make payment in lieu of notice (unless otherwise required by law).||For our Chief Executive Officer, her role based pay was split 50% in phantom shares and 50% in cash, with phantom share restrictions lifting over five years (20% each year), in line with the Barclays PLC approach. Shares to be delivered on the next quarterly delivery date shall be pro rated for the number of days, from the start of the relevant quarter to the termination date.|
|Treatment of annual bonus on termination||There is no automatic entitlement to bonus on termination, but it may be considered at the Committee’s discretion and subject to performance measures being met and pro rata for service. No bonus will be payable in the case of gross misconduct or resignation.|
|Treatment of unvested deferred bonus awards||Outstanding deferred bonus awards would lapse if the executive officer or prescribed officer leaves by reason of resignation or termination for gross misconduct. However, in the case of death, or if the executive director or prescribed officer is an eligible leaver defined as leaving due to injury, disability or ill health, retirement, redundancy, or in circumstances where Barclays Africa terminates the employment, he/she would continue to be eligible to be considered for unvested portions of deferred awards – subject to the rules of the relevant plan – unless the Committee determines otherwise in exceptional cases. Deferred awards are subject to malus provisions which enable the Committee to reduce the vesting level of deferred bonuses (including to nil).||In an eligible leaver situation, deferred bonus awards may be considered for release in full on the scheduled release date unless the Committee determines otherwise in exceptional circumstances.|
All deferred awards are subject to continued employment and malus provisions. Under these provisions, we may reduce the level of vesting of deferred awards, including to zero where (but not limited to):
- a participant deliberately misled the Group, the market and/or shareholders in relation to the financial performance of the Group;
- a participant caused harm to our reputation, or where their actions amounted to misconduct, incompetence, poor performance or negligence;
- there is a material restatement of the Group’s financial statements;
- there is a material failure of risk management in the Group; and/or
- there is a significant deterioration in the Group’s financial health.
The Remuneration Review Panel (RRP) is an executive sub-committee of the RemCo and is chaired by the Chief Risk Officer. The RRP makes recommendations to the RemCo on risk management, compliance and control matters relating to remuneration. In particular, the RRP makes recommendations to us on adjustments to bonus pools, individual awards, malus adjustments and clawback.
The RRP follows a robust process for considering risk and conduct matters and the associated consequences reflected in individual incentive decisions. When considering individual responsibility, a variety of factors are taken into account, such as:
- whether the individual was solely responsible for the event, or whether others were also responsible, if not directly involved;
- whether the individual was aware (or could reasonably have been expected to be aware) of the failure;
- whether the individual took or missed opportunities to take adequate steps to address the failure; and
- where the individual, by virtue of seniority, could be deemed indirectly responsible, including employees who drive the Group’s culture and set its strategy.
Individuals who were directly or indirectly accountable for an event have had their remuneration adjusted as appropriate. This includes reductions in current year bonus and reductions in vesting amounts of deferred awards through the application of malus.
Following the recommendation of the RRP, we determined that certain bonus pools and/or individual awards will be reduced after considering risk and conduct events within the business.
Clawback applies to any variable remuneration awarded to a material risk taker from 1 January 2015. The RemCo may apply clawback, at any time during the seven-year period from the date on which variable remuneration is awarded, if:
- there is reasonable evidence of employee misbehaviour or material error; and/or
- the Group or business unit suffers a material risk management failure, taking account of the individual’s proximity to and responsibility for that incident.